Table of Contents

Introduction	1
Legal Definition of Earthquake	1
The Richter Scale	2
Seismologists formula	3
Increased seismic activity and fracking	4
Earthquake Insurance	6
Consider key factors that go beyond the surface of the policy	8
Few Insurers Offer Earthquake Policies	9
Factors Affecting the Buying Decision	11
Who Should Purchase Earthquake Coverage?	12
Exclusions or Limittions in Earthquake Policies	14
Fire	14
Land/Vehicles/Pre-Existing Damage	15
External Water Damage/Masonry and Brick Veneer	16
Determining Insurance Amounts	16
Coverage Limits and Sub-Limits	16
Replacement Cost versus Market or Loan Value	17
The 80% Rule and Periodic Reviews	17
Contents and Personal Property/Additional Living Expenses (ALE)	18
Deductibles and Cost-Sharing in Earthquake Insurance	18
How Deductibles Are Applied/Deductibles and Affordabilit Concerns	19
Why Deductibles Are Structured This Way	19
Per-Occurrence or Per-Coverage Deductibles	20
How Insurers Price Earthquake Coverage (U.S. & Canada)	20
Location (macro-zone + micro-site)/Age and Codes	21
Construction Type and Building Height	21
Rebuild Cost (Replacement Cost) and Local Inflation	21
Deductible Selection (Percent of Coverage)	22
Risk Concentrtion & Reinsurance/Mitigation and Credits	22
Coverage Nationally (U.S. & Canada)	23
Commercial Property Considerations	23
Buying Commercial Earthquake Coverage is a Stratigic Choice	25
Commercial Underwriting	25
Chart:	27
Options for Insurance Coverage to Cover Potential Loss	27
Toolkits To Consider	28
Case Study: Earthquake Coverage with various options in Action	31
Mitigation Strategies	32
Post-event Recovery	32
Earthquake Business Insurance – Summary/Recap	33

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